Swiss Trading Swiss Re agrees $1.5bn credit line

Swiss Re, the world's second-largest reinsurer, has agreed a $1.5bn (£1bn) long-term credit facility to allow it to take advantage of "significant opportunities" emerging in the reinsurance market.
The insurance giant said it had agreed the credit facility with investment bank JP Morgan to meet US regulatory requirements for its life business.
It added that the financing, which matures in 2028, will replace existing arrangements the company has in place for collateral for the US business.
Previously it provided the required collateral for its Swiss Re Life and Health America businesses by placing various assets in a trust. Those assets will now effectively be freed up to support the rest of Swiss Re.

The company declined to comment on speculation that the credit line will allow it to become more involved in merger and acquisition deals, but said the "unprecedented turmoil in the capital markets" had created opportunities for "well capitalised insurance and reinsurance companies".
Swiss Re added it was "in a strong position to respond to increasing demands from our clients for reinsurance solutions".
Jacques Aigrain, Swiss Re's chief executive, said "notwithstanding the difficult capital market environment", the arrangement with JP Morgan "will further enhance our position to be able to benefit from opportunities that arise from the current market environment".

One insurance analyst said it was possible that Swiss Re is raising money for acquisitions. He noted the company had been active in a number of major deals, and had been in discussions to provide reinsurance support to private equity firm CVC, which is mulling a bid for the insurance assets of Royal Bank of Scotland.
However, the analyst described the decision to renegotiate the credit facility now – just before the year end – as curious. He said: "I am always cynical about companies raising money at this time of the year."
Swiss Re described the new financing as "attractive" but disclosed few details of the arrangement.
Another analyst said the deal might provide policyholders with a greater sense of security. Tim Dawson, an analyst with Helvea in Geneva, told Bloomberg: "This means that in the end, the US policy-holder knows that if the worst comes to the worst, JP Morgan will advance the money to make good the losses from a financial shortfall."


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